Enron Corp is to sell its wind turbine assets to the Power Systems business of GE.
Enron Corp has reached an agreement to sell the wind turbine manufacturing assets of Enron Wind Corp., its wind power subsidiary, to the Power Systems business of GE. This transaction, which is subject to regulatory and Bankruptcy Court approval, is expected to close in April 2002. It will be GE’s first venture into the wind power business.
Headquartered in Tehachapi, California, Enron Wind has 1600 employees worldwide and a strong manufacturing position in the three countries with the largest demand for wind power: the US, Germany and Spain. It also manufactures in in the Netherlands and maintains eleven sales offices in countries around the world.
“While Enron Wind has been a good business with solid returns, its future growth requires more capital than we can justify under current circumstances,” said Stanley Horton, chairman and CEO of Enron Global Services, which includes Enron Wind. “The proceeds of this sale will help to repay our creditors. I am confident that the wind company will be a good business for GE.” The purchase includes the company’s global wind turbine manufacturing and marketing operations, but does not affect Enron owned or operated wind farms. GE will continue the operational support for most of these facilities.
In connection with the sale, Enron Wind will concurrently file a voluntary petition for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York. Subject to necessary bankruptcy court and regulatory approvals, the transaction is expected to close in the second quarter of 2002.
John Rice, president and CEO of GE Power Systems, commented “The acquisition of Enron Wind represents GE Power Systems’ initial investment into one of the fastest growing energy sectors.” The wind energy industry is expected to grow at an annual rate of about 20 per cent, with principal markets in Europe, the US and Latin America.